Why Are These Four Stocks on the Move on Friday?

With the stock market ending the week on a positive note, boosted by strong earnings reported by tech giants, a number of stocks are trending amid large trading volume on the back of various news. Among them, AbbVie Inc (NYSE:ABBV) is up by 5%, recovering from yesterday’s slump, while Skechers USA Inc (NYSE:SKX), Fortinet Inc (NASDAQ:FTNT) and Southwestern Energy Company (NYSE:SWN) have plummeted today. Let’s take a closer look at these four stocks, assess the news that sparked their moves and see if the smart money sentiment agrees with the crowd on them.

The hedge fund sentiment can allow retail investors to identify stocks that are best positioned for long-term growth. However, while many of the hedge funds’ top picks are safe and can generate profits over the span of several years, there is another way to emulate hedge funds’ activity and obtain large gains in a shorter time period. We are talking about the best small-cap ideas among hedge funds. Our research showed that the 15 top small-caps among hedge funds can beat the market by an average of 95 basis points per month. The Insider Monkey strategy identifies these 15 stocks after each round of 13F filings and it has returned 102% since August 2012, beating the S&P 500 ETF (SPY) by some 53 percentage points (see more details here).

However, let’s get back to our analysis of the four trending stocks. On the first spot is AbbVie Inc (NYSE:ABBV), which has advanced by over 5% so far today. Yesterday, around one hour before the closing bell, the stock plummeted and closed over 10% in the red after the FDA issued a warning that AbbVie Inc (NYSE:ABBV)’s hepatitis drugs Vekira Pak and Technivie can cause liver damage. The company responded to the warning and said that it will update the prescribing labels. Meanwhile, Abbvie’s stock is down by 21% year-to-date, affected by the recent broader market sell-off. However, the smart money investors from our database like the company, as the number of funds with long positions went up to 79 from 72 during the second quarter, while the total value of their holdings represented 5.70% of its outstanding stock at the end of June. Billionaire Ken Fisher‘s Fisher Asset Management is one of the investors bullish on AbbVie Inc (NYSE:ABBV), disclosing in its latest 13F filing that it holds a position of 927,959 shares as of September 30.

Skechers USA Inc (NYSE:SKX) is one of the big losers on Friday, as its stock has slid by over 33% so far in intraday trading. The reason for the drop can be found in the financial results released by the company for the third quarter. Skechers USA Inc (NYSE:SKX) posted sales of $856 million, up by 27% on the year, but below estimates of $877 million. Its earnings per share of $0.43 advanced from $0.33 posted a year earlier, but were significantly below estimates of $0.55. Investors were also disappointed to see an 11.8% increase in wholesale business, compared to much higher growth rates in previous quarters. During the second quarter, the company saw a decrease in popularity among the funds from our database, with the number of stockholders falling to 30 from 36, while the aggregate value of their holdings represented 9.10% of the company’s outstanding stock. Louis Navellier‘s Navellier & Associates is one of the investors that bet on Skechers USA Inc (NYSE:SKX) heading into the fourth quarter, reporting a stake of 201,023 shares in its recent 13F filing.

Fortinet Inc (NASDAQ:FTNT)‘s stock is down by 20% on the back of its financial results for the last quarter, although the company managed to beat both earnings and revenue expectations. The company delivered 35% annual revenue growth to $260.1 million, while adjusted earnings per share inched up to $0.14 from $0.12. Compared to estimates, Fortinet Inc (NASDAQ:FTNT)’s earnings were $0.02 above estimates and revenue came in slightly above the estimates of $259.4 million. However, among the funds we track, Fortinet Inc (NASDAQ:FTNT) did not manage to capture a lot of attention, since only 26 funds reported holding stakes equal to 4.60% of its outstanding stock (by comparison 45 funds reported stakes in rival Palo Alto Networks Inc (NYSE:PANW)).

Finally, Southwestern Energy Company (NYSE:SWN) is down by 5%, which is slightly higher than at the opening. The oil and gas E & P company disappointed investors by swinging to a net loss of $4.62 per share for the third quarter, compared to a profit of $0.60 delivered in the same period of 2014. Its revenue also declined to $748 million, down by 19% year-over-year, and below estimates of $767 million. However, the adjusted net profit of $0.01 per share, was better than the $0.03 loss expected by the Street. Overall, the funds that owned shares of Southwestern Energy Company (NYSE:SWN) at the end of June were somewhat optimistic about its prospects, as they amassed over 8% of its outstanding stock. However, only 33 funds held positions in Southwestern Energy Company (NYSE:SWN) out of more than 700 that we track, including Israel Englander‘s Millennium Management, D. E. Shaw, and Steve Cohen‘s Point72 Asset Management.

Disclosure: None